@jmski52 said: But we were promised no more inflation....
By whom?
The orange man. 75 million folk heard it.
For the mods, or others, this is not a political comment. Inflation and gold are linked (like all dollar denominated assets, mostly). And discussion of policies and ideologies of folk pertaining to controlling inflation are appropriate in such a PM forum.
@jmski52 said: I want 20% guaranteed for 30 years!!
If there was a free market, the 30 year bond might have to go to 20% just to cancel the inflation that's coming.
Highly unlikely, since interest rates of 12-14% were enought to stop inflation that peaked at 10-11% after a rising decade. REAL interest rates are restrictive, they were NEGATIVE in the late-1970's.
It wouldn't do much for the economy, though. If there was no Fed, the market would adjust by itself.
Maybe...but an internal adjustment is wrenching. Do you think prices and wages are perfectly flexible like in an Introductory Economics textbook ? Check out the EU and their "adjustments" the last 25 years....lost wages and output...falling nominal GDP....a rising Denominator Effect.
Stop GF. Let them eat cake. Give them what they want. I'm hungry.
@dcarr said:
You seem to keep repeating the argument that we shouldn't closely scrutinize banks because they haven't been making a lot of money. That is exactly what the banks want people to think. You evidently have friends and connections there, since you work in that arena. So your apologetic portrayal is not surprising. In fact, it seems to be standard bank speak.
No, I can read balance sheets and income statements and I can also see how the stocks are doing. If this was the 1990's where banks kicked-ass, you'd know it from the stocks and lots of M&A activity. Even in the early-2000's the stocks did well up to the GFC.
Nothing like that today, though the market is hopeful that the new administration will give a green light to M&A's and reducing the 4,000-plus banks.
But member/owner banks of the Federal Reserve have been making money.
How much does JPM make from the Fed vs. investment banking (M&A) ? I think their share of Fed profits is $15 million a year.....they make BILLIONS from M&A.
What do you think is more important to them ?
You bring up Fidelity Investments and how they lost a billion dollars each year due to low interest rates. This is not true. It is exactly the type of "bank speak" I am referring to. Perhaps (or perhaps not) their profits would have been a billion higher if interest rates were higher. But they didn't "lose" any money, certainly not a billion per year. In fact, they still made a lot. They have actually had record profits every year, for the last 10 years. This data (below) is what I compiled in a couple minutes of looking up various news articles:
I didn't say that privately held Fidelity didn't make money. I said they lost $1 billion a year in LOST FEES because of ZIRP which you insist was good for the "banking cartel" and Fed-member banks. Fidelity LOST money in subsidizing $400 billion in money market funds (others lost, too) because they still had expenses and costs to pay even though the assets yielded close to nothing.
It's one reason why negative interest rates were never a likelihood here -- too much upheaval for banks and financial firms.
That doesn't appear to be a company that we should have pity for. In fact, maybe it is a good company to buy stock in ?
Fidelity Investment is privately held by the Johnson Family and employees of Fidelity. Unless you can generate market-beating returns relative to the S&P 500 and join them as a portfolio manager or analyst, you aren't getting any stock.
@GoldFinger1969 said:
How much does JPM make from the Fed vs. investment banking (M&A) ? I think their share of Fed profits is $15 million a year.....they make BILLIONS from M&A.
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So you think $15 million is all that JP Morgan Chase gets out of their relationship with the FED ?
If that is all they get out of it, then they shouldn't care too much about giving it up, right ?
But just try and take away JPM's ownership share of the FED and you will see JPM vehemently object.
JPM gets something a lot more valuable than $15 million. They get backing, connections, and inside information. Steering economic policy so as to ensure success for JPM's endeavors (and the endeavors of other member banks) is what the FED does best. But that is done at a higher priority than the welfare of the general public.
@dcarr said:
So you think $15 million is all that JP Morgan Chase gets out of their relationship with the FED ?
If that is all they get out of it, then they shouldn't care too much about giving it up, right ?
But just try and take away JPM's ownership share of the FED and you will see JPM vehemently object.
It's like a trade association or club. And if there are all these so-called "benefits" then how come it doesn't translate into mega-profits ? You're just making stuff up, DCarr.
JPM gets something a lot more valuable than $15 million. They get backing, connections, and inside information. >Steering economic policy so as to ensure success for JPM's endeavors (and the endeavors of other member banks) >is what the FED does best. But that is done at a higher priority than the welfare of the general public.
None of that happens and none would be material to them anyway. Again, if it did, their stock prices wouldn't have SUCKED for 20 years.
@dcarr said:
So you think $15 million is all that JP Morgan Chase gets out of their relationship with the FED ?
If that is all they get out of it, then they shouldn't care too much about giving it up, right ?
But just try and take away JPM's ownership share of the FED and you will see JPM vehemently object.
It's like a trade association or club. And if there are all these so-called "benefits" then how come it doesn't translate into mega-profits ? You're just making stuff up, DCarr.
JPM gets something a lot more valuable than $15 million. They get backing, connections, and inside information. >Steering economic policy so as to ensure success for JPM's endeavors (and the endeavors of other member banks) >is what the FED does best. But that is done at a higher priority than the welfare of the general public.
None of that happens and none would be material to them anyway. Again, if it did, their stock prices wouldn't have SUCKED for 20 years.
Backing ? Connections ? Inside information ?
No...no...and NO.
You are just making this stuff up.
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You are just attempting to cover for them.
You say they don't get backing, connections, or inside information from being a member in this "club" ?
Of course they get all that, at our expense. For example, the actions of the Federal Reserve in 2008 were certainly meant to support their owners above all others.
That graph confirms a lot. I think JPM has tendrils into the Fed in a big way.
I note their future earnings estimates form several analysts are lower than current. I suspect whatever goes up that much will come down some next year.
@Goldminers said:
That graph confirms a lot. I think JPM has tendrils into the Fed in a big way.
The chart shows nothing really. You want to see a chart of the Mag 7 or even the S&P 500 ? Or forget JPM....let's see BAC, Citibank, and all the other money center banks. Dcarr will then tell us that JP Morgan is the bank with all the "secret" connections.
I note their future earnings estimates form several analysts are lower than current. I suspect whatever goes up that >much will come down some next year.
EPS are highly dependent on the Fed. Even Powell today said that it's not a given what the Fed will do -- so JPM doesn't have any special insight.
@dcarr said:
You are just attempting to cover for them.
No, I'm clearing up misinformation that you are posting which would steer people the wrong way. Conspiracy theories aren't investable.
You say they don't get backing, connections, or inside information from being a member in this "club" ?
No, where's your proof ?
Of course they get all that, at our expense. For example, the actions of the Federal Reserve in 2008 were certainly >meant to support their owners above all others.
Again, the facts say otherwise. You posted a chart of JPM, the best of the best, and not Wells Fargo which has doubled (5% a year).....or BankAmerica (down over the last 15 years)....or Citibank (1/10th the share price).
Yeah, go talk to a Citibank shareholder....diluted to hell....as part of "The Club".....and tell them they get secret benefits from "owning" the Fed and being part of "The Club" and had great insider information about the Great Financial Crisis.
You'd have more credbility if you talked about how Enron was a great investment unfairly attacked by the government !
@dcarr said:
You are just attempting to cover for them.
No, I'm clearing up misinformation that you are posting which would steer people the wrong way. Conspiracy theories aren't investable.
You say they don't get backing, connections, or inside information from being a member in this "club" ?
No, where's your proof ?
Of course they get all that, at our expense. For example, the actions of the Federal Reserve in 2008 were certainly >meant to support their owners above all others.
Again, the facts say otherwise. You posted a chart of JPM, the best of the best, and not Wells Fargo which has doubled (5% a year).....or BankAmerica (down over the last 15 years)....or Citibank (1/10th the share price).
Yeah, go talk to a Citibank shareholder....diluted to hell....as part of "The Club".....and tell them they get secret benefits from "owning" the Fed and being part of "The Club" and had great insider information about the Great Financial Crisis.
You'd have more credbility if you talked about how Enron was a great investment unfairly attacked by the government !
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"Steering people the wrong way" ? Which way is the wrong way ? This is a serious question.
There are usually a few losers in any club, often dictated by internal power struggles. But do you still want to stick to your story that the stock price performance of all the FED member/owner banks has been awful ?
I've already shown JPM.
Here is the chart of another prominent FED member/owner (Goldman Sachs):
Who "owns" the Fed.
The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system and thus own the Fed banks.
The concept of “ownership” needs some explaining here, however. The member banks must by law invest 3 percent of their capital as stock in the Reserve Banks, and they cannot sell or trade their stock or even use that stock as collateral to borrow money. They do receive dividends of 6 percent per year from the Reserve Banks and get to elect each Reserve Bank’s board of directors.
The private banks also have a voice in regulating the nation’s money supply and setting targets for short-term interest rates, but it’s a minority voice. Those decisions are made by the Federal Open Market Committee, which has a dozen voting members, only five of whom come from the banks. The remaining seven, a voting majority, are the Fed’s Board of Governors who, as mentioned, are appointed by the president.
@dcarr said:
I've already shown JPM.
Here is the chart of another prominent FED member/owner (Goldman Sachs):
You cherry-picked the 2 elite members of the large money center banks and investment banking. You didn't show us group performance or even #2 or #3 members in each group for a good reason: JPM and GS have really kicked-ass and their stock performance has NOTHING to do with what you are saying and everything to do with being the default option for folks in that sector.
BTW, GS has returned 5.3% a year ex-dividends since 2008. You think that's great ? S&P 500 at 9.4%, almost double. Rolling time periods will confirm the lousy performance of GS.
@Goldminers said:
Who "owns" the Fed.
The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system and thus own the Fed banks.
The concept of “ownership” needs some explaining here, however. The member banks must by law invest 3 percent of their capital as stock in the Reserve Banks, and they cannot sell or trade their stock or even use that stock as collateral to borrow money. They do receive dividends of 6 percent per year from the Reserve Banks and get to elect each Reserve Bank’s board of directors.
The private banks also have a voice in regulating the nation’s money supply and setting targets for short-term interest rates, but it’s a minority voice. Those decisions are made by the Federal Open Market Committee, which has a dozen voting members, only five of whom come from the banks. The remaining seven, a voting majority, are the Fed’s Board of Governors who, as mentioned, are appointed by the president.
The 5 members from Regional FRBs are chosen on a rotating basis. The NY Fed has a permanent vote and is Vice Chairman of the FOMC. The other 4 votes are rotated annually from the remaining 11 FRBs. This is a legacy result of NY and Wall Street being disproportionately involved in banking over 100 years ago, hence the permanent vote for the NY Fed.
@dcarr said:
I've already shown JPM.
Here is the chart of another prominent FED member/owner (Goldman Sachs):
You cherry-picked the 2 elite members of the large money center banks and investment banking. You didn't show us group performance or even #2 or #3 members in each group for a good reason: JPM and GS have really kicked-ass and their stock performance has NOTHING to do with what you are saying and everything to do with being the default option for folks in that sector.
BTW, GS has returned 5.3% a year ex-dividends since 2008. You think that's great ? S&P 500 at 9.4%, almost double. Rolling time periods will confirm the lousy performance of GS.
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JPM and GS were the first two I thought of, and the only ones that I looked up the stock price history for.
You didn't address my serious question, so I will pose it again.
You stated that I was "steering people the wrong way".
Your uninformed insistence that the Fed is bailing out banks and that membership in the FRB System is some sort of lucrative prize, like getting free stock and options at SpaceX or Tesla....is nonsense.
Banking has SUCKED as an investment going back 15-20 years.
I do think bank stocks could now be entering a great period of M&A and consolidation. We have 4,000 banks....would love to see it cut in half by 2030.
Your uninformed insistence that the Fed is bailing out banks and that membership in the FRB System is some sort of lucrative prize, like getting free stock and options at SpaceX or Tesla....is nonsense.
Banking has SUCKED as an investment going back 15-20 years.
I do think bank stocks could now be entering a great period of M&A and consolidation. We have 4,000 banks....would love to see it cut in half by 2030.
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Then nationalize the FED. The member/owner banks won't care because (according to you) they get no benefit from it.
Just because the stock price of some banks has "sucked", that doesn't mean that they didn't get unfair advantage and benefits from the FED. As I stated before, most any sort of club is going to have internal power struggles and winners and relative losers.
The only two banks for which I recently bothered to look up their stock price history have both done very well (JPM, GS).
So I'm an influencer now ?
I "steer" people away from banks, which (again according to you) is the "wrong way" ?
People should be just as skeptical about banks, as banks are skeptical about making loans to people.
@dcarr said: Then nationalize the FED. The member/owner banks won't care because (according to you) they get no benefit from it.
Uh huh...and then when we get a shock to the economy, then what ? Instead of fixing the problem in 6 months we let it take 6 years and cost us tens of trillions in lost output ?
Just because the stock price of some banks has "sucked", that doesn't mean that they didn't get unfair advantage and benefits from the FED. As I stated before, most any sort of club is going to have internal power struggles and winners and relative losers.
You clearly can't do basic math. 99% of the banks have lagged the S&P 500 by triple-digits. It's not even close.
You clearly don't understand how central banking works. You apparently think that barter or the gold standard can work in today's economy. They can't.
Banking has SUCKED as an investment going back 15-20 years.
The relevant question is --- How did management do all this time while "banking sucked" so bad for the past 15-20 years?
How's their golden parachutes these days? Did anybody ever get fired for poor performance in banking?
And lest we forget, per Wikipedia -
In March 2009, AIG compounded public cynicism concerning the "too big to fail" firm's bailout by announcing that it would pay its executives over $165 million in executive bonuses.[65] Total bonuses for the financial unit could reach $450 million, and bonuses for the entire company could reach $1.2 billion
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said: Banking has SUCKED as an investment going back 15-20 years.
The relevant question is --- How did management do all this time while "banking sucked" so bad for the past 15-20 years? How's their golden parachutes these days? Did anybody ever get fired for poor performance in banking?
Some...but since the peer group performance is lousy, you don't stand out for poor performance. It's been 15 years of regulatory stranglehold. Very little M&A...no consolidation.
Needs to change.
And lest we forget, per Wikipedia - In March 2009, AIG compounded public cynicism concerning the "too big to fail" firm's bailout by announcing that it would pay its executives over $165 million in executive bonuses.[65] Total bonuses for the financial unit could reach $450 million, and bonuses for the entire company could reach $1.2 billion
Remember, AIG probably isn't in trouble if the NY AG doesn't force out the long-time CEO and replace him with an incompetent. In fact, he did the same thing at Citibank.
So 2 companies...where politicians chose the CEO....both nearly went under. Think about that.
The banks and the Fed can get away with shenanigans all day long and their managements don't suffer the consequences of bad management and insider self-dealing with impunity.
This must change.
Q: Are You Printing Money? Bernanke: Not Literally
@dcarr said: Then nationalize the FED. The member/owner banks won't care because (according to you) they get no benefit from it.
Uh huh...and then when we get a shock to the economy, then what ? Instead of fixing the problem in 6 months we let it take 6 years and cost us tens of trillions in lost output ?
Just because the stock price of some banks has "sucked", that doesn't mean that they didn't get unfair advantage and benefits from the FED. As I stated before, most any sort of club is going to have internal power struggles and winners and relative losers.
You clearly can't do basic math. 99% of the banks have lagged the S&P 500 by triple-digits. It's not even close.
You clearly don't understand how central banking works. You apparently think that barter or the gold standard can work in today's economy. They can't.
Let the free market reign and it will prevail. Central planning of the economy doesn't work (except for those few doing the planning). Central planning by the government could hardly be worse than the job the FED has done. But neither is a good arrangement.
The "shocks" to the economy are never actually fixed. The free market if left alone would fix it. It would be painful at first, but then we would all be better for it. But instead the FED steps in to help their members/owners by "papering over" the problem and prolonging and amplifying the problem. Now with such a great debt over-hang, even a minor "shock" could bring the debt structures crashing down. But every fix adds more weight to the overhang.
Like a drug addition - do you take the pain now and be done with it, or prolong the addiction ?
Clearly, the FED's member/owner banks want to be the "drug dealers" and keep the economy addicted.
@dcarr said: Then nationalize the FED. The member/owner banks won't care because (according to you) they get no benefit from it.
Uh huh...and then when we get a shock to the economy, then what ? Instead of fixing the problem in 6 months we let it take 6 years and cost us tens of trillions in lost output ?
Just because the stock price of some banks has "sucked", that doesn't mean that they didn't get unfair advantage and benefits from the FED. As I stated before, most any sort of club is going to have internal power struggles and winners and relative losers.
You clearly can't do basic math. 99% of the banks have lagged the S&P 500 by triple-digits. It's not even close.
You clearly don't understand how central banking works. You apparently think that barter or the gold standard can work in today's economy. They can't.
Let the free market reign and it will prevail. Central planning of the economy doesn't work (except for those few doing the planning). Central planning by the government could hardly be worse than the job the FED has done. But neither is a good arrangement.
The "shocks" to the economy are never actually fixed. The free market if left alone would fix it. It would be painful at first, but then we would all be better for it.
Also, those without full and unencumbered ownership of assets that people would want.
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So everyone....lots of pain...except those with unemcumbered assets? Those folk will be sitting high and pretty? Those asset values will remain stable?
Also, those without full and unencumbered ownership of assets that people would want.
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So everyone....lots of pain...except those with unemcumbered assets? Those folk will be sitting high and pretty? Those asset values will remain stable?
What happens to those encumbered assets?
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I will answer your questions if you answer mine:
Who do you work for ?
What do you do for a living ?
Also, those without full and unencumbered ownership of assets that people would want.
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So everyone....lots of pain...except those with unemcumbered assets? Those folk will be sitting high and pretty? Those asset values will remain stable?
What happens to those encumbered assets?
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I will answer your questions if you answer mine:
Who do you work for ?
Irrelevant. Why do you feel the need for personal questions? Are you looking for a suitor?
What do you do for a living ?
My living consists of and is dependent upon eating, drinking and breathing. It's been a good gig so far.
They only have about $130 billion in an account to cover FDIC insurance losses, and the total deposits amount to trillions, So if the top banks go under, there is only pennies to pay account holders. They may borrow from the Treasury, but that probably is unlikely as they will not have enough to pay for everything in an emergency. Most people have less than a couple thousand in the banks so this may not matter much (they would probably cover the small accounts and work their way up the chain). But it will be for people who think they are wealthy and secure, as they will be the ones to lose the majority of what they own in the banks.
Gold holdings will never be used by a nation to pay its existing debts. At most they will be used to buy what they need when their currency is no longer accepted. They agree that it is dollar (currency) protection.
From one of the smartest gold researchers in the world:
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
@dcarr said:
Like a drug addition - do you take the pain now and be done with it, or prolong the addiction ?
Clearly, the FED's member/owner banks want to be the "drug dealers" and keep the economy addicted.
@dcarr said:
Like a drug addition - do you take the pain now and be done with it, or prolong the addiction ?
Clearly, the FED's member/owner banks want to be the "drug dealers" and keep the economy addicted.
The addiction will NOT kill the patient.
The cure will.
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I guess that says it all, from a banker's perspective.
Also, those without full and unencumbered ownership of assets that people would want.
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So everyone....lots of pain...except those with unemcumbered assets? Those folk will be sitting high and pretty? Those asset values will remain stable?
What happens to those encumbered assets?
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I will answer your questions if you answer mine:
Who do you work for ?
Irrelevant. Why do you feel the need for personal questions? Are you looking for a suitor?
What do you do for a living ?
My living consists of and is dependent upon eating, drinking and breathing. It's been a good gig so far.
You don't have to be specific.
Questions answered.
So where will the encumbered assets go?
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Very relevant. Who you work for and what you do speaks to what your motives are. It is pretty clear what the motivation is for most of the posters here (precious metals owners). You apparently prefer to hide and be an anonymous spokesperson for banking/financial interests. Until you make such disclosure, I think it best to assume that you are paid (or get paid) by these banking/financial interests.
Any reputable financial news organization requires that a commentator disclose their name, who they work for, and what positions they have in the market.
Also, those without full and unencumbered ownership of assets that people would want.
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So everyone....lots of pain...except those with unemcumbered assets? Those folk will be sitting high and pretty? Those asset values will remain stable?
What happens to those encumbered assets?
.
I will answer your questions if you answer mine:
Who do you work for ?
Irrelevant. Why do you feel the need for personal questions? Are you looking for a suitor?
What do you do for a living ?
My living consists of and is dependent upon eating, drinking and breathing. It's been a good gig so far.
You don't have to be specific.
Questions answered.
So where will the encumbered assets go?
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Very relevant. Who you work for and what you do speaks to what your motives are. It is pretty clear what the motivation is for most of the posters here (precious metals owners). You apparently prefer to hide and be an anonymous spokesperson for banking/financial interests. Until you make such disclosure, I think it best to assume that you are paid (or get paid) by these banking/financial interests.
Any reputable financial news organization requires that a commentator disclose their name, who they work for, and what positions they have in the market.
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Me thinks.you make lots of assumptions.
Me also thinks you place greater emphasis on messenger than message.
My motivation is in my sig-line and apparently that ruffles feathers. Too bad.
The idea of paying off (some) of the national debt with gold is floating around, but my question would be whether the dollar is about to be revalued (as FDR did) - before paying off some debt, or after?
It seems that the debt payoff would have to occur after, not before the revaluation in order to get maximal mileage from the revaluation.
If that's so, don't we expect much higher gold prices before the revaluation?
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said:
The idea of paying off (some) of the national debt with gold is floating around, but my question would be whether the dollar is about to be revalued (as FDR did) - before paying off some debt, or after?
No way in Hades the incoming administration condones paying off the debt.
No way in Hades the incoming administration condones paying off the debt.
Assuming that the plan is only to increase the debt (going exponential), we should expect precious metals prices (and most everything else) to follow a similar trajectory, correct?
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said: No way in Hades the incoming administration condones paying off the debt.
Assuming that the plan is only to increase the debt (going exponential), we should expect precious metals prices (and most everything else) to follow a similar trajectory, correct?
@jmski52 said:
The idea of paying off (some) of the national debt with gold is floating around, but my question would be whether the dollar is about to be revalued (as FDR did) - before paying off some debt, or after? It seems that the debt payoff would have to occur after, not before the revaluation in order to get maximal mileage from the revaluation. If that's so, don't we expect much higher gold prices before the revaluation?
Since none of this is happening.;...it's irrelevant.
@jmski52 said:
Assuming that the plan is only to increase the debt (going exponential), we should expect precious metals prices (and most everything else) to follow a similar trajectory, correct?
Why ? Reagan exploded the debt and gold got cut in half.
Lots of variables affect the gold price. I think the big factors are tailwinds but we shall have to see.
@jmski52 said:
Assuming that the plan is only to increase the debt (going exponential), we should expect precious metals prices (and most everything else) to follow a similar trajectory, correct?
Why ? Reagan exploded the debt and gold got cut in half.
Lots of variables affect the gold price. I think the big factors are tailwinds but we shall have to see.
You know that's because gold had risen 10 fold, interestvrates were 15% and the stock market was traded at 1x book and had a 6% dividend yield.
If there was an opposite scenario then that would be today.
Bitcoin killer whales can manipulate the price already and some are highly involved with government influencers.
If they decide to take some profits at $100k, after keeping the available for sale supply down to keep current buying momentum high, they can drop the price down incredibly fast when they sell.
Then rinse and repeat.
Gold is not quite as volatile as crypto, and individuals have less influence on its price. As long as central banks are buying, I still prefer buying gold with them, and maybe some silver at this stage of the cycles.
Comments
The orange man. 75 million folk heard it.
For the mods, or others, this is not a political comment. Inflation and gold are linked (like all dollar denominated assets, mostly). And discussion of policies and ideologies of folk pertaining to controlling inflation are appropriate in such a PM forum.
Knowledge is the enemy of fear
Stop GF. Let them eat cake. Give them what they want. I'm hungry.
Knowledge is the enemy of fear
Check out the EU and their "adjustments" the last 25 years....lost wages and output...falling nominal GDP....a rising Denominator Effect.
The EU has had more problems** because **of their controlled economies, not because of any free market adjustments.
I knew it would happen.
No, I can read balance sheets and income statements and I can also see how the stocks are doing. If this was the 1990's where banks kicked-ass, you'd know it from the stocks and lots of M&A activity. Even in the early-2000's the stocks did well up to the GFC.
Nothing like that today, though the market is hopeful that the new administration will give a green light to M&A's and reducing the 4,000-plus banks.
How much does JPM make from the Fed vs. investment banking (M&A) ? I think their share of Fed profits is $15 million a year.....they make BILLIONS from M&A.
What do you think is more important to them ?
I didn't say that privately held Fidelity didn't make money. I said they lost $1 billion a year in LOST FEES because of ZIRP which you insist was good for the "banking cartel" and Fed-member banks. Fidelity LOST money in subsidizing $400 billion in money market funds (others lost, too) because they still had expenses and costs to pay even though the assets yielded close to nothing.
It's one reason why negative interest rates were never a likelihood here -- too much upheaval for banks and financial firms.
Fidelity Investment is privately held by the Johnson Family and employees of Fidelity. Unless you can generate market-beating returns relative to the S&P 500 and join them as a portfolio manager or analyst, you aren't getting any stock.
interest rates of 12-14% were enought to stop inflation that peaked at 10-11% after a rising decade.
As I recall, Voelker pushed rates up to 19% for a time.
I knew it would happen.
20% in 1980 was for Fed Funds. Long-term interest rates peaked at 15% for US Treasuries....14% for mortgages.....17% for corporate bonds.
To get back on topic. US physical gold reserves will never be used to pay off our national debt.
My US Mint Commemorative Medal Set
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So you think $15 million is all that JP Morgan Chase gets out of their relationship with the FED ?
If that is all they get out of it, then they shouldn't care too much about giving it up, right ?
But just try and take away JPM's ownership share of the FED and you will see JPM vehemently object.
JPM gets something a lot more valuable than $15 million. They get backing, connections, and inside information. Steering economic policy so as to ensure success for JPM's endeavors (and the endeavors of other member banks) is what the FED does best. But that is done at a higher priority than the welfare of the general public.
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It would be idiotic. You just roll-over the existing debt.
It's like a trade association or club. And if there are all these so-called "benefits" then how come it doesn't translate into mega-profits ? You're just making stuff up, DCarr.
None of that happens and none would be material to them anyway. Again, if it did, their stock prices wouldn't have SUCKED for 20 years.
Backing ? Connections ? Inside information ?
No...no...and NO.
You are just making this stuff up.
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You are just attempting to cover for them.
You say they don't get backing, connections, or inside information from being a member in this "club" ?
Of course they get all that, at our expense. For example, the actions of the Federal Reserve in 2008 were certainly meant to support their owners above all others.
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That graph confirms a lot. I think JPM has tendrils into the Fed in a big way.
I note their future earnings estimates form several analysts are lower than current. I suspect whatever goes up that much will come down some next year.
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I think he is just lamenting the fact he doesn't own any.
Knowledge is the enemy of fear
You just roll-over the existing debt.
And the next thing you know, it's $36 trillion and eats up the whole economy.
I knew it would happen.
The chart shows nothing really. You want to see a chart of the Mag 7 or even the S&P 500 ? Or forget JPM....let's see BAC, Citibank, and all the other money center banks. Dcarr will then tell us that JP Morgan is the bank with all the "secret" connections.
EPS are highly dependent on the Fed. Even Powell today said that it's not a given what the Fed will do -- so JPM doesn't have any special insight.
No, I'm clearing up misinformation that you are posting which would steer people the wrong way. Conspiracy theories aren't investable.
No, where's your proof ?
Again, the facts say otherwise. You posted a chart of JPM, the best of the best, and not Wells Fargo which has doubled (5% a year).....or BankAmerica (down over the last 15 years)....or Citibank (1/10th the share price).
Yeah, go talk to a Citibank shareholder....diluted to hell....as part of "The Club".....and tell them they get secret benefits from "owning" the Fed and being part of "The Club" and had great insider information about the Great Financial Crisis.
You'd have more credbility if you talked about how Enron was a great investment unfairly attacked by the government !
About $28 trillion excluding intra-government agencies. Publicly-held debt is what matters.
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"Steering people the wrong way" ? Which way is the wrong way ? This is a serious question.
There are usually a few losers in any club, often dictated by internal power struggles. But do you still want to stick to your story that the stock price performance of all the FED member/owner banks has been awful ?
I've already shown JPM.
Here is the chart of another prominent FED member/owner (Goldman Sachs):
Who "owns" the Fed.
The stockholders in the 12 regional Federal Reserve Banks are the privately owned banks that fall under the Federal Reserve System. These include all national banks (chartered by the federal government) and those state-chartered banks that wish to join and meet certain requirements. About 38 percent of the nation’s more than 8,000 banks are members of the system and thus own the Fed banks.
The concept of “ownership” needs some explaining here, however. The member banks must by law invest 3 percent of their capital as stock in the Reserve Banks, and they cannot sell or trade their stock or even use that stock as collateral to borrow money. They do receive dividends of 6 percent per year from the Reserve Banks and get to elect each Reserve Bank’s board of directors.
The private banks also have a voice in regulating the nation’s money supply and setting targets for short-term interest rates, but it’s a minority voice. Those decisions are made by the Federal Open Market Committee, which has a dozen voting members, only five of whom come from the banks. The remaining seven, a voting majority, are the Fed’s Board of Governors who, as mentioned, are appointed by the president.
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You cherry-picked the 2 elite members of the large money center banks and investment banking. You didn't show us group performance or even #2 or #3 members in each group for a good reason: JPM and GS have really kicked-ass and their stock performance has NOTHING to do with what you are saying and everything to do with being the default option for folks in that sector.
BTW, GS has returned 5.3% a year ex-dividends since 2008. You think that's great ? S&P 500 at 9.4%, almost double. Rolling time periods will confirm the lousy performance of GS.
The 5 members from Regional FRBs are chosen on a rotating basis. The NY Fed has a permanent vote and is Vice Chairman of the FOMC. The other 4 votes are rotated annually from the remaining 11 FRBs. This is a legacy result of NY and Wall Street being disproportionately involved in banking over 100 years ago, hence the permanent vote for the NY Fed.
https://www.federalreserve.gov/monetarypolicy/fomc.htm
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JPM and GS were the first two I thought of, and the only ones that I looked up the stock price history for.
You didn't address my serious question, so I will pose it again.
You stated that I was "steering people the wrong way".
Which way is the wrong way ?
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Your uninformed insistence that the Fed is bailing out banks and that membership in the FRB System is some sort of lucrative prize, like getting free stock and options at SpaceX or Tesla....is nonsense.
Banking has SUCKED as an investment going back 15-20 years.
I do think bank stocks could now be entering a great period of M&A and consolidation. We have 4,000 banks....would love to see it cut in half by 2030.
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Then nationalize the FED. The member/owner banks won't care because (according to you) they get no benefit from it.
Just because the stock price of some banks has "sucked", that doesn't mean that they didn't get unfair advantage and benefits from the FED. As I stated before, most any sort of club is going to have internal power struggles and winners and relative losers.
The only two banks for which I recently bothered to look up their stock price history have both done very well (JPM, GS).
So I'm an influencer now ?
I "steer" people away from banks, which (again according to you) is the "wrong way" ?
People should be just as skeptical about banks, as banks are skeptical about making loans to people.
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Uh huh...and then when we get a shock to the economy, then what ? Instead of fixing the problem in 6 months we let it take 6 years and cost us tens of trillions in lost output ?
You clearly can't do basic math. 99% of the banks have lagged the S&P 500 by triple-digits. It's not even close.
You clearly don't understand how central banking works. You apparently think that barter or the gold standard can work in today's economy. They can't.
Banking has SUCKED as an investment going back 15-20 years.
The relevant question is --- How did management do all this time while "banking sucked" so bad for the past 15-20 years?
How's their golden parachutes these days? Did anybody ever get fired for poor performance in banking?
And lest we forget, per Wikipedia -
In March 2009, AIG compounded public cynicism concerning the "too big to fail" firm's bailout by announcing that it would pay its executives over $165 million in executive bonuses.[65] Total bonuses for the financial unit could reach $450 million, and bonuses for the entire company could reach $1.2 billion
I knew it would happen.
Some...but since the peer group performance is lousy, you don't stand out for poor performance. It's been 15 years of regulatory stranglehold. Very little M&A...no consolidation.
Needs to change.
Remember, AIG probably isn't in trouble if the NY AG doesn't force out the long-time CEO and replace him with an incompetent. In fact, he did the same thing at Citibank.
So 2 companies...where politicians chose the CEO....both nearly went under. Think about that.
Could you miss my point more than you did?
The banks and the Fed can get away with shenanigans all day long and their managements don't suffer the consequences of bad management and insider self-dealing with impunity.
This must change.
I knew it would happen.
Let the free market reign and it will prevail. Central planning of the economy doesn't work (except for those few doing the planning). Central planning by the government could hardly be worse than the job the FED has done. But neither is a good arrangement.
The "shocks" to the economy are never actually fixed. The free market if left alone would fix it. It would be painful at first, but then we would all be better for it. But instead the FED steps in to help their members/owners by "papering over" the problem and prolonging and amplifying the problem. Now with such a great debt over-hang, even a minor "shock" could bring the debt structures crashing down. But every fix adds more weight to the overhang.
Like a drug addition - do you take the pain now and be done with it, or prolong the addiction ?
Clearly, the FED's member/owner banks want to be the "drug dealers" and keep the economy addicted.
How much pain, and who would endure the most?
Knowledge is the enemy of fear
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At this point, a lot since it has been put off for so long. It would have been a lot less painful earlier.
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Bankers that jump out of windows.
Also, those without full and unencumbered ownership of assets that people would want.
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So everyone....lots of pain...except those with unemcumbered assets? Those folk will be sitting high and pretty? Those asset values will remain stable?
What happens to those encumbered assets?
Knowledge is the enemy of fear
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I will answer your questions if you answer mine:
Who do you work for ?
What do you do for a living ?
You don't have to be specific.
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Irrelevant. Why do you feel the need for personal questions? Are you looking for a suitor?
My living consists of and is dependent upon eating, drinking and breathing. It's been a good gig so far.
Questions answered.
So where will the encumbered assets go?
Knowledge is the enemy of fear
They only have about $130 billion in an account to cover FDIC insurance losses, and the total deposits amount to trillions, So if the top banks go under, there is only pennies to pay account holders. They may borrow from the Treasury, but that probably is unlikely as they will not have enough to pay for everything in an emergency. Most people have less than a couple thousand in the banks so this may not matter much (they would probably cover the small accounts and work their way up the chain). But it will be for people who think they are wealthy and secure, as they will be the ones to lose the majority of what they own in the banks.
Gold holdings will never be used by a nation to pay its existing debts. At most they will be used to buy what they need when their currency is no longer accepted. They agree that it is dollar (currency) protection.
From one of the smartest gold researchers in the world:
The government is incapable of ever managing the economy. That is why communism collapsed. It is now socialism’s turn - Martin Armstrong
The addition will NOT kill the patient.
The cure will.
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I guess that says it all, from a banker's perspective.
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Very relevant. Who you work for and what you do speaks to what your motives are. It is pretty clear what the motivation is for most of the posters here (precious metals owners). You apparently prefer to hide and be an anonymous spokesperson for banking/financial interests. Until you make such disclosure, I think it best to assume that you are paid (or get paid) by these banking/financial interests.
Any reputable financial news organization requires that a commentator disclose their name, who they work for, and what positions they have in the market.
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Me thinks.you make lots of assumptions.
Me also thinks you place greater emphasis on messenger than message.
My motivation is in my sig-line and apparently that ruffles feathers. Too bad.
So where do the encumbered assets go?
Knowledge is the enemy of fear
They just had a middleware fintech company called Synapse go belly up with fake FDIC insurance that wiped out many people.
The idea of paying off (some) of the national debt with gold is floating around, but my question would be whether the dollar is about to be revalued (as FDR did) - before paying off some debt, or after?
It seems that the debt payoff would have to occur after, not before the revaluation in order to get maximal mileage from the revaluation.
If that's so, don't we expect much higher gold prices before the revaluation?
I knew it would happen.
No way in Hades the incoming administration condones paying off the debt.
Knowledge is the enemy of fear
No way in Hades the incoming administration condones paying off the debt.
Assuming that the plan is only to increase the debt (going exponential), we should expect precious metals prices (and most everything else) to follow a similar trajectory, correct?
I knew it would happen.
Thats the plan.
Knowledge is the enemy of fear
Since none of this is happening.;...it's irrelevant.
Why ? Reagan exploded the debt and gold got cut in half.
Lots of variables affect the gold price. I think the big factors are tailwinds but we shall have to see.
You know that's because gold had risen 10 fold, interestvrates were 15% and the stock market was traded at 1x book and had a 6% dividend yield.
If there was an opposite scenario then that would be today.
Knowledge is the enemy of fear
Since none of this is happening.;...it's irrelevant.
Is it irrelevant that they are talking about selling gold to buy bitcoin as a "strategic reserve"?
Why wouldn't they just print up more dollars and buy as much bitcoin as they want with imaginary fiat dollars?
I knew it would happen.
Bitcoin killer whales can manipulate the price already and some are highly involved with government influencers.
If they decide to take some profits at $100k, after keeping the available for sale supply down to keep current buying momentum high, they can drop the price down incredibly fast when they sell.
Then rinse and repeat.
Gold is not quite as volatile as crypto, and individuals have less influence on its price. As long as central banks are buying, I still prefer buying gold with them, and maybe some silver at this stage of the cycles.
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